Indian office real estate hit an all time low with values nearly bottoming out as compared to its peak around 8-12 months ago, in fact, the commercial real estate values dropped by an average of 25% in all markets and touched 50% in some..

Giving a sense of the depreciation in commercial real estate values, specifically office space, Arjun Kumar, director of AsiaPac International India says, “Commercial and IT space has witnessed almost 40-50% correction compared to rates 6-8 months ago, across NCR.” He quotes the lease rent in Gurgaon for warm shell as anything between Rs 60-75 /sq ft /month and Noida (on the expressway and Sector 62) as Rs 45-55 /sq ft /month while one can get a steal at Sectors 63, 64 (which are primarily industrial sector but IT/ITeS are allowed to operate ) at Rs 25-30 /sq ft /month for warm shell space , and here additional space is being added almost every day.

Delhi CBD (Connaught Place) also witnessed correction of 40-50%. Says Kumar, “One can have space here between Rs 100-175 /sq ft/month depending on the building (A or B Grade) and maintenance, upkeep of the respective buildings. In South Delhi, Saket and Jasola District Centre in particular, have been witnessing almost 30-45% correction in lease rent as well as capital value. The lease rent being quoted in Jasola is Rs 140-175 /sq ft/month wherein capital value is anything between Rs 11,000-13,000/sq ft for commercial office space.” Apart from the values dropping, there has been a substantial drop in transactions. If at all transactions were happening, they were restricted to the suburbs such as Gurgaon’s Udyog Vihar, as well as builder sectors and Noida — on the expressway, Sector 62, 63, 64.

Delhi witnessed the lowest number of transactions in office space in the last one year, while the maximum transaction in office space took place in Gurgaon in Delhi NCR. Gurgaon witnessed majority of the absorption due to availability of Grade A office space in prime areas, available at attractive rates. Early completion of upcoming Metro corridor has also added value to the whole package (against Gurgaon always seen as suffering from lack of public transport).

Enter your email address:         Delivered by FeedBurner

Tags: Commercial space in Delhi, Delhi CBD, Delhi office space, Gurgaon office space, Indian office real estate, Office space in India

This entry was posted on Saturday, July 18th, 2009 and is filed under Commercial Property In India. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.